8 money moves for expectant parents

CherylLock

If you’re expecting a child, probably the last thing you need is another to-do list, but hear us out. Preparing yourself financially for a baby involves a slew of things. And, while we wouldn’t pretend to know what that means for each individual who is expecting, there definitely are a few major things that, if you can check them off your list before your baby comes, will make things a bit easier when the baby arrives.

1. Create the perfect registry

It might seem trivial to include this in a list of important financial things to do before your baby arrives, but trust me. Creating a registry full of items you’ll actually use and need, rather than items you just covet, will help in the long run. Don’t be afraid to put big-ticket items on there since many baby stores offer completion discounts on items that don’t get purchased.

2. Update your budget

This’ll probably elicit a big, fat “duh” from many would-be parents, but it’s worth a gentle reminder. Until you crunch some numbers, you have no idea how much baby might cost in those first few months, and that ominous “babies are so expensive!” catchphrase might play itself over and over in your mind. If you sit down and look at your budget, you could be pleasantly surprised.

In my case, looking at our preliminary budget for baby included making sure I had enough in savings (outside of our emergency fund) to cover maternity leave, since, as a freelancer, if I don’t work, I don’t make money. It also included researching what child care costs in our area and factoring that into our monthly fees after I went back to work. After that, we estimated some extra expenses for diapers and wipes. The surprising part came when we realized that, because of the generosity of others (see above regarding the perfect registry), we barely needed anything for the nursery or any clothes for our child’s first few months — and believe me when I say that was helpful.

3. Figure out your kid’s health care

As much as this should be part of your regular budget, it deserves its own bullet point. If you haven’t already, you and your partner (if you have one) should figure out where health coverage for your child will come from. You’ll also need to consider how you’ll pay for immediate deductibles since you won’t be the only one to come out of your delivery with hospital bills. Your baby will have some, as well. Also, consider copays for the many doctor visitors your baby will make in the first few months. (Remember, unpaid medical bills can wind up hurting your credit..)

4. Start thinking about work

If you’re certain you want to go back to work, skip ahead to No. 5. If you’re less sure, think about what life as a stay-at-home parent might look like — both financially and emotionally — before baby comes. Once you’ve put together a new estimated budget and thought about how to provide your kid with health care, you might have a better idea of whether staying home with your kid is feasible.

5. Create a will & name a guardian (or guardians)

As uncomfortable a thought as it might be, it’s smart to put together a will and name a guardian for your child as soon as possible. Remember, you can always name two separate types of guardians — one who will physically watch over your child and one who will be in charge of their finances — if that’s better for your particular situation. You can find a primer on estate planning here.

6. Apply for life insurance

Getting a life insurance policy is right up there with creating a will when it comes to unsavory topics, but again, it’s the responsible thing to do. A life insurance policy will ensure your child is taken care of financially should something happen to you, and the peace of mind that provides can be valuable.

7. Start thinking about college

Even if you don’t set up a college savings account before your baby is born, it helps to start considering if, and how much, you’ll pay toward your child’s college education. Remember, saving for your kid for college should never detract from your own retirement savings — after all, loans are available for college, but not for retirement. If you’re not sure where to start when it comes to considering your kid’s college plans, check out this piece about whether or not a 529 might be right for you.

8. Make a list of things you’ll need to do after baby is born

There are a few important financial things you won’t be able to take care of until after your baby is born because you’ll need things like the birth date and Social Security number. It’s a good idea to make that list before your baby’s arrival, though, since things afterward can get hectic (and sleepy). Updating your beneficiaries, for example, is something you’ll likely want to include.

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